Egg prices up by almost 20% since start of year with more rises to come

Egg prices have risen by almost 20% in some cases since the start of the year, according to The Grocer’s analysis of Assosia data.

Of the 174 shell egg lines in the traditional big four, the discounters and Waitrose, some 40 have increased in price since w/e 5 January.

The biggest rise was in Morrisons, where a Hoads Farm Free Range Eggs Large six-pack has increased 18.4% since the start of the year from £1.90 to £2.25.

The next biggest rises were also at Morrisons: its Chuckle Free Range Eggs for Farmers medium six-packs were up 12.1% and large egg packs were up by 10%, rising to £1.85 and £2.20 respectively.

The cause of these rises is likely a “cost drag” according to Martin Glinski, managing director at St Ewe Eggs, as retailers and suppliers adjust to historic cost rises from six to 12 months ago which have taken some time to show.

However, Glinski warned there would be more price rises to come. 

Read more: New bird flu measures brought in as numbers rise

“The biggest thing is there is quite a chunk of cost increase to come, so what we are seeing at the moment is probably going to pale in comparison to what we are going to see in April,” said Glinski. 

The impact of the rising national living wage, National Insurance and packaging tax would contribute to a “cost burden on our business that effectively wipes all our profits out for last year”, so these costs would all have to be “passed on”, he added.

In addition, should the government not backtrack on the announced changes to inheritance tax, this is also likely to push up prices in the long term as it is a “fundamental change to the farming business model” which will have to be factored into farmers’ budgets.

Bird flu was not yet a driver of cost inflation, he suggested. However, it was starting to cause shortages in the egg supply chain, driving some retailers to take on more supply partners, he said. 

Read more: Concerns over barn egg supply after major avian flu outbreak

“We have had more sales enquiries from customers in the last two weeks than we have had in the last six months because there’s a shortage and I think people are looking for resilience in the supply chain, so it might not be that they are short now but they are anticipating it,” he added. 

The numbers of bird flu cases this year are already significant and are surpassing what we have seen previously, he explained, with many more months of the higher risk season to come, ”the trend is not going away, it is going to continue and unfortunately the likelihood of it hitting other poultry businesses is quite high”. 

This week, the government further expanded bird flu housing measures due to rising case numbers.

Defra announced its avian influenza prevention zone with housing measures would be extended to five new areas on 16 February.